Wednesday, November 30, 2016

#MoneySense: Export insurance, get it. Global villages are far

￼
You will be fed to the dogs if you go into exporting without insuring your exports.

Producers and farmers also need insurance. Denis Wabuyi (accountant) is working on an insurance paper for Uganda for farmers.

Generally buyers work on terms. Net 30,60,90,120.

Your export board or export association will usually sell you membership and export insurance.

Canada has EDC (export development Canada).

EDC costs $250 per year and then charges minimal on all your sales which you declare within Canada and global.

EDC runs a credit check on the buyer and country and after assessing the risk, they give you the maximum amount of sales and terms of payment.

I was a half owner of a seafood export company for 5yrs.

I always complained about the $250 per year fee. And the insurance on all exports. They refused to reduce the rates so I learned to work inaurance into all invoices. And in any case, most global buyers want to deal with someone registered with EDC and the Chamber of Commerce. Protection for both sides.

My rule is not to ship unless prepaid. However, most importers get the product, sell it and then pay you. Hence payment terms.

So this company in Italy orders lobster tails. EDC checked them out. Dun and Bradstreet checked out and confirmed eith EDC. All was okay. Payment terms were 120.

Three days after shipping, my assistant says "mom, dudes in Italy say they did not get. Gonna sleep". I look at the kid thinking it is not like her to walk away from a job. She had conveniently left the email on the screen. She had called both airlines and the freeze storage in Toronto to get all the boxes onto Allitalia.

Oh my gosh, I trace everything and it had all been cleared in Venice. So what was this nonsense?

A week later that company died and was not traceable. Our account manager at EDC was walking on water. We could not file a claim till after 120 days.

But we had all emails so we filed earlier. That company had been insured for 90% of the invoices.

Some $55,000 short, EDC sends us a cheque for $45,000. We needed all the working capital and this one company had tried to kill us.

The local airline also sent us $30,000 for some of their employees colluded and the airline realised that it was not the first time except this time they had clear information.

What happened to the farmers of Uganda when exports to EU were banned in 2014 for perishables? Ask Kyambadde as she sanctioned it and is today hitting on the Uganda National Chamber of Commerce!

Martha Leah Nangalama

Information you might not like but could use. I have a solid background in IT and Business.